The US Rugby Federation went bankrupt due to the coronavirus pandemic

The coronavirus pandemic inflicted a “control shot” on the US Rugby Federation. The message about its bankruptcy was published on the official website of the. The procedure was launched in accordance with Chapter 11 of the special code, allowing future reorganization.

Now everyone, who is not indifferent to the fate of the US national rugby team, will expect the corresponding “reset” that the federation has taken due to the negative consequences of COVID-19. The bankruptcy process is conducted with the direct assistance of the International Rugby Federation.

The problems in the budget of the federation had arisen earlier, but a break in sporting events as a result of a pandemic, has triggered a chain of negative factors that led to bankruptcy. In response to the pandemic, the federation announced a 30-day break for the previously announced competitions on March 13, and a week later (March 20), it suspended the competition for an indefinite period.

Measures of social isolation and a break in activities were taken in the interests of the health of members of the federation, including athletes.

However, the organization lost a significant part of the revenue that was coming from paying the membership fees. The sponsors support, as well as other sources of profit (for example, funds from the sale of souvenir products) ended as well, and a shortage of resources was inevitable.

According to the press service, filing for the bankruptcy is the most appropriate strategy in exceptional circumstances. The US Rugby Council hopes to thereby create a financial basis for further sustainable development. It is curious that the bankruptcy vote took place on the weekend, and was supported almost unanimously. In addition, a package of documents was presented to the members of federation, containing a list of anti-crisis measures and supported by the world rugby executive committee.

Sports male and female programs for young people over the age of 7 and 15 years old will still be protected and supported, since they are the most competitive on the world stage.

In accordance with the law, a special procedure will take place within 30 days. For a month, the lenders should consider and approve the proposed plans for financial restructuring, recommended by the court. As Federation Chairwoman Barbara O'Brien notes, “This is the most difficult period the organization has ever faced.”

However, the rugby union is ready to further the development of the game. It is reported that now the organization will be forced to reduce staff and managerial salaries, but measures will not affect the national teams. Athletes will continue training and preparing for sport competitions.